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Don't Kill Your Home Deal With This Mistake


Certain surprises can arise during the home buying process that can ruin the transaction if mishandled. If you don't handle your credit properly during this time, you might kill your own deal.

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There are some surprises that can seemingly come out of nowhere in a real estate transaction that can take the wind out of your sails or even completely kill a deal. To help me break these surprises down in order to help you avoid them, I've brought in mortgage expert Peter Wease with Fairway Independent Mortgage.
 

According to Peter, the number one killer is opening up new credit. Some home buyers want to buy a new car or new things for their new home like furniture, curtains, paint, etc. Even worse–many buyers open credit without telling their lender. You should avoid opening any new credit at all when buying a house. The house should be the only thing you're focusing your finances on.


Opening new credit is the best way to ruin your mortgage qualification.


After you close, then you can think about those new purchases. In the early steps of the process, your lender will run a credit check, and your mortgage qualification is based on your credit at that time. If that changes midstream, your credit score or debt-to-income ratio could change, and your lender might not be able to get you approved in the end.
 

If you need help with a home loan or a refinance or you have any questions for him, give him a call at 503-267-6391.
 

If you have any questions for me or you're thinking about buying or selling a home in Portland, give me a call or send me an email. I'd love to help you in any way I can!

The Current Health of the Portland Market


I like to use the Case-Shiller monthly report to examine the health of our market and to examine where we're headed. Based on the most recent report, we look to be headed in the right direction.

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Buying a Portland home? Search all homes for sale


To examine the market on a monthly basis, one tool we like is the Case-Shiller S&P Index that you can get online. It continues to show us appreciation across the country at a healthy 5%. The report is broken down into 10 and 20-city composites, with Portland in the 20-city composite.
 

Portland is leading the way in this report. The 20-city composite was actually down slightly in this last report from 5.1% to 5%, but Portland is at 12.4% appreciation. Before you overreact to that, understand that we were even higher than that at one point. We're starting to see it trend downward, but that's a good thing.
 

The report also notes that most analysts are expecting the Fed to raise interest rates this December. Even if they do, though, the impact on mortgage rates and the mortgage industry are going to be so minimal that we'll still see these historically low rates, so there's nothing to get too worried about.


Portland is leading the way.


We also get questions all the time about whether we're in a bubble that's going to pop soon. We're so programmed with bubbles these days that I believe we just overreact. We know we're not in a bubble by looking at outstanding mortgage debt and seeing that we're about 12.6% lower than what it was at its peak in the 1st quarter of 2008, and we're not seeing much growth there.
 

In the video above, you can see a table that demonstrates how healthy the indexes are compared to the peak of the market in 2006 and the trough of 2012. We're starting to see the market shift, and we need to see the market shift. We're not seeing up to 10 offers on almost everything, and that's a good thing.
 

If you have any questions at all about where our market is going and what it means to you as a buyer, seller, or homeowner, give me a call or send me an email. I'd love to hear from you!

Why Are Transaction Timelines Longer in the Portland Area?


The average business day turn times for different counties here in Portland are varying to a strange degree. This is because there just aren’t enough appraisers for all the people moving into Portland. 

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Our office recently had a transaction that was supposed to close at the end of September but got postponed by half of a month purely because the appraisal took so long to come in. Why?

Today we’ve invited Peter Wease, our preferred lender from Fairway Independent Mortgage, to talk about turn times for appraisals in the Portland area and how they’re affecting transaction timelines. According to Peter, this type of delay isn’t uncommon. His company has been tracking this type of occurrence for the past year, and they see weekly updates based on different counties.

As you can see in the video above,
on September 18th, Clackamas County’s average business day turn time was almost 21 days. On October 3rd, it increased to 23 days. This is in contrast, however, to Washington County, whose average business day turn time dropped from 28 days on September 18th to 16.5 days on October 23rd.



The appraisers need help.


The primary factor in this kind of drastic variance from county to county is the fact that roughly 111 people are moving to Portland every single day, and there just aren’t enough appraisers to keep up. The best way to change this turn time, then, is to get more help to the appraisers.

Another consequence of this situation is that appraisal fees have soared. Appraisers are getting inundated by other appraisal management companies, so they’re demanding higher fees and being more selective in which appraisals they choose to undertake. Who pays for that increase? The customer. It’s unfortunate, but it’s the truth.

The moral of the story is that, for the time being, it’s going to be hard to close a transaction in just 30 days in the Portland area. You’d be well-advised to prepare for it to take as long as 45 or even 50 days. In addition, let your clients know about what’s going on with these turn times so they can prepare as well.

If you have any other questions for Pete about current mortgage rates, you can call him at 503-267-6391.

As always, if there’s anything else you’d like us to address relative to the mortgage finance aspect of real estate transactions, give me a call or send me an email. I look forward to talking with you soon!